An Inside Look at Share Repurchase Disclosure Modernization

On Wednesday, May 3, the SEC adopted the final rules on the amendments to the Share Repurchase Disclosure Modernization, which require the disclosure of an issuer’s equity repurchase program and its share repurchases. The forms impacted by the amended disclosure require iXBRL tagging and include Forms 10-Q, 10-K, 20-F, N-CSR, and new Form F-SR.

For those not familiar with share repurchase disclosure rules, they were initially proposed in December 2021 and called for day-after reporting of share purposes. In the final rules, this requirement shifted, requiring companies to report daily repurchase details rather than monthly aggregate figures.

Some of the other elements listed in the SEC’s rules Fact Sheet require companies to:

• Disclose daily repurchase activity quarterly.
• Check a box indicating if certain directors or officers traded in the relevant securities within four business days before or after the public announcement of their repurchase plan or program.
• Provide narrative disclosure about their repurchase programs and practices in their periodic reports.
• Provide quarterly disclosure in their Forms 10-K and 10-Q related to their adoption and termination of 10b5-1 trading arrangements.

It’s worth noting that the passage did not come unanimously. There were two dissenting votes, including one from SEC Commissioner Hester Peirce. In her dissenting statement, Peirce stated, "The final rule, although it wisely backs off essentially real-time disclosure of issuer buybacks, is flawed in its granularity. The reasonable investor does not need to know about every repurchase by every public issuer. Disclosure of daily repurchase information will 'bury [investors] in an avalanche of trivial information[,] a result that is hardly conducive to informed decision making.'"

Whatever side you are on, it’s important to share the timing details. Companies other than foreign private issuers and listed closed-end funds must comply with the amendments beginning with the first filing that covers the first full fiscal quarter starting on or after October 1, 2023.

As with many of these SEC rules, there are bound to be questions. If you are looking for clarity on the new rules, the required forms, timing, and more, the DFIN team encourages you to reach out. We are available to answer questions and offer guidance.